Importer Caught Out by Sudden Increases to Duty Costs

27 February 2012

A recent Tax Tribunal case of Manchester Candle Company (MCC) v HMRC outlines the dangers of significant additional duties turning overseas purchases into significant losses.

The MCC purchased candles from a supplier in China in and agreed for delivery to be made in 6 batches.

The imposition of ADD on Chinese Candles meant that MCC could not carry on selling the candles for profit and so it cancelled their final order batch and had to forfeit its deposit. The appeal concerned whether MCC would have to pay duty on a batch of candles that left China after the imposition of ADD but were imported in to the EU after the ADD measures took effect.

The tribunal had sympathy for MCC but had to dismiss its appeal. The legal provisions were clear in that the duty point for ADD was import to free circulation and not when the contract was entered into or the goods were shipped.

Lessons learned:

It is important that businesses purchasing goods from overseas have a clear understanding of whether there are any ADD measures in the pipeline that could impact on your purchases.

In an ideal world it would also be advisable to include a clause in your contract terms that allow you the right to cancel any contracts if ADD or other restrictive measures are imposed on them. We have come across a case where an importer was tied in to a loss making contract for 24 months because of the imposition of ADD.

Browse Articles

By Category
Anti Dumping Classification Duty Relief General Origin Valuation
By Tag
By Date
2016 2015 2014 2013 2012 2011 2010 2009

Mailing List

To stay abreast of important news and announcements, join our monthly mailing list.


About Us

We established ITS back in 2001 on the principle of delivering clear and measurable value to the highest professional standards, something that I feel passionately about to this day.

Find out more

What We Do

We understand that you are having to do more with less resulting in long to-do lists, urgent deadlines and a growing pile of projects which could add value if you only had the time.

Find out more

Latest News

From the four building blocks (Origin, Classification, Valuation and Duty Reliefs) to Senior Accounting Officers and their responsibilities and the introduction of AEO.

Latest News